Allstate can once again sell auto insurance in Florida, now that an appellate court has stayed a ban from the Florida Insurance Commissioner. Commissioner McCarty is peeved over Allstate’s continuing refusal to comply with a subpoena for documents that might prove that the insurer flooded consumers in hurricane-prone areas with higher rates. [Chicago Tribune]

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  1. ripple says:

    Why shouldnt people who live in areas prone to flooding pay more for their flood insurance. it makes sense. If you are stupid enough to build a house in an area that you know WILL flood you should expect to pay more as they will definitely have to pay numerous claims on your policy

  2. While I agree, where I live in FL isn’t in a flood area and yet I’m getting raked over the coals because of these retarded McMansions on the coast. However, these fat cat insurance companies have had 3+ years now of INCREASED premiums from us and NO payouts because there have been no freaking hurricanes hitting FL since 2004!

  3. Sudonum says:

    @rainmkr: Wasn’t Wilma in ’05 after Katrina? [www.nhc.noaa.gov] Not that it makes much difference in your assertion, but the Insurance CO’s would tell you that it’s only been 2 seasons rather than 3.

  4. gStein_*|bringing starpipe back|* says:

    @Sudonum: i was evacuated from school during wilma because it was supposed to hit my area of Florida (Tampa)

  5. descend says:

    @rainmkr:

    Huh? Wilma was the insurance industry’s third-most expensive storm ever.

  6. brent_w says:

    Isn’t it illegal to not comply with a subpoena?

    If there is a subpoena for documents, Allstate should be held accountable for failing to comply.

  7. trollkiller says:

    You know sometimes you have to hunt out the answers. Damn lazy reporters. Information taken from: [www.bizjournals.com]

    Here is the basic breakdown.

    Florida Office of Insurance Regulation (FOIR) subpoenaed records from Allstate. Allstate produced 40,000 pages.

    FOIR did not feel that Allstate complied with the subpoena and suspended them from writing auto and home insurance.

    Allstate appealed the suspension based on the fact they feel they did comply with the subpoena. They asked the court to stay the suspension while the court deliberates on the issue.

    FOIR has 10 days to appeal the stay.

  8. loueloui says:

    What, the scumbags are at it again? A few years ago Charlie Crist (then insurance commissioner, currently governor) got legislation passed that would force insurance companies to offer ALL of their insurance products in Florida, and not cherrypick the most profitable.

    The idiots at Allstate, instead of taking their medicine and moving on like everyone else, complained to anyone who would listen, and then filed suit.

    There is a real insurance crisis in Florida. Mostly because greedy insurance companies have become really good at taking premiums, and conveniently forgetting about their obligations when they have a catastrophe. Hey guys that’s not all profit. Maybe you should put some aside in case you have to pay claims.

    I have a very modest policy on my home which is worth ~200K, and more than 20 miles from the coast with a really high deductible, and I am paying more than $400 per month. This is for a really generic insurance carrier. God help me if I ever have to file a claim.

  9. doctor_cos wants you to remain calm says:

    @trollkiller: And you can’t always believe what you read.
    Yes, Allstate produced prodigious amounts of information for the FOIR.
    NO, they did not produce the specific information which was was indicated in the original subpoena.
    The FOIR gave Allstate more time to come up with the requested information (one shining example is an industry report dealing with ways for the insurer to ‘reduce their exposure’ to having to pay claims in hurricane prone areas (like Florida?).
    Allstate refused, calling the reports ‘trade secrets.’
    The FOIR asks how these can be trade secrets, as much of the information is already available publicly?
    Allstate said no, we don’t have to comply, we’ve already complied.
    The Florida Insurance Commissioner (Gordon) McCarty then suspended Allstate from writing new policies in Florida until they complied with the original subpoena.
    Allstate then runs to court whining about how they shouldn’t be punished as they feel they have complied with the subpoena.

    And so it goes.
    Even a cursory glance at the facts here would seem to indicate that Allstate is the guilty party here.
    The FOIR asks for a specific report. Allstate gives them a boatload of paperwork and says, it’s in there. Didn’t we see this in a movie [us.imdb.com] about err…’suspect’ lawyers?

  10. doctor_cos wants you to remain calm says:

    What happened to the eloquent post I just submitted?

  11. RvLeshrac says:

    @doctor_cos:

    Bravo

    But…

    @loueloui:

    That’s stupid

    and…

    @ripple:

    This is true. I’m of the belief that people should not be given ANY insurance offers for living in flood plains or *BELOW* sea level *ON THE COAST*, *IN A HURRICANE-PRONE AREA*.

    There are plenty of people who game the system – building houses in flood-prone areas, taking out insurance for more than the actual cost of building (property values), collecting the insurance, profiting, then rebuilding on the SAME SPOT.

    Insurance companies are evil, but if you live in a flood-plain or directly on one of the hurricane-ridden coasts, you deserve exactly what you get: floods and hurricanes.

  12. Blaaaah says:

    It’s just the price you pay to live in Florida.
    It’s not a matter of ‘if you file a claim’ but rather- -when- you file a claim for Florida homeowners. All those people filing all those claims eats away at the money they take in. But they made a profit for the last two years. Good! When the next bad hurricane hits they’ll be able to pay the claims. The only company I know that is writing homeowners insurance in FL is Citizens which is heavily subsidized by the government. They insure a majority of Florida homes- when another hurricane hits, I seriously doubt their ability to pay out claims. We’ll see, sooner or later though.
    So yes, FL Homeowners should pay more for their insurance. I don’t want to pay more on my policy because other people chose to live where it’s an eventuality that they will be hit with a Hurricane.

    I know there is NO way I could afford to live in FL- so, I don’t.

  13. MYarms says:

    @RvLeshrac:
    Great argument, so if you live in Kansas you deserve to have your house destroyed by a tornado. If you live in a hot area you deserve to have your electricity turned off randomly in the summer. If you live in the city you deserve to be robbed or murdered. If you live anywhere that has any kinds of problems apparently you deserve what you get.

    Solution: kill yourself.

  14. Sudonum says:

    @RvLeshrac:
    “There are plenty of people who game the system – building houses in flood-prone areas, taking out insurance for more than the actual cost of building (property values), collecting the insurance, profiting, then rebuilding on the SAME SPOT”

    Cite please? As I believe it’s impossible to purchase any kind of insurance for more than the replacement cost of the structure and it’s contents.

  15. RvLeshrac says:

    @Sudonum:

    You can insure for the sale value of the home.

    Otherwise those “$10 million” mansions you hear about would only be able to get $1M insurance policies for the house itself.

  16. RvLeshrac says:

    @RvLeshrac:

    Oh, and I believe it was Brit Hume who was gaming the system (talk about hypocrisy). I’ll have to ask my stepfather, since I can’t seem to find the quote. I don’t watch FOX News.

  17. RvLeshrac says:

    @RvLeshrac:

    Err… specifically. If one person was doing it, you can bet there’s a long line.

    (House on the northeast coast, for the record, with flood insurance)

  18. RvLeshrac says:

    @MYarms:

    Tornadoes are unpredictable – they don’t hit the same town every year.

    Power outages due to air conditioning are due to people running the A/C for *TOO LONG* and at *TOO LOW A TEMPERATURE*, so yes, that IS the public’s fault.

    Robberies and murders are a completely different category. They’re utterly unpredictable, in many situations.

    Hurricanes are predictable. They don’t necessarily occur every single year in the same place, but they occur on the same coasts. They bring far more damage than tornadoes and floods alone. They don’t travel far inland.

    My problem with a lot of these areas is that they’re (*coughNewOrleanscough*) *BELOW* sea level. The hazards are obvious, predictable, and frequent.

  19. Sudonum says:

    @RvLeshrac:
    You can insure for the appraised value, or you can insure for the replacement value. You cannot insure the land value.

  20. Sudonum says:

    @RvLeshrac:
    “My problem with a lot of these areas is that they’re (*coughNewOrleanscough*) *BELOW* sea level. The hazards are obvious, predictable, and frequent.”

    When the Federal Government spends millions (billions?) of your tax dollars to build a levee system to ensure the safety of those residents. Provide insurance companies with assurances that it is safe (and profitable) to write policies there. And lending institutions that flood insurance is not required, how is it the residents fault that the levees failed spectacularly?

    And to follow your line of thinking, many residents aren’t rebuilding there because it is below seas level and they don’t trust the assertions of the Corp of Engineers that the levees are safe. And many of those that are rebuilding are doing so on piers.

  21. doctor_cos wants you to remain calm says:

    @Sudonum: When the Federal Government ignores the deteriorating condition of said levee system to throw money at dubya’s pet (Iraq) project instead, how is this going to ensure the safety of those (US) residents?
    If you didn’t want to hear this argument, you shouldn’t have brought up the Gov’t (non)involvement in keeping US residents safe FIRST AND FOREMOST. (This would include the residents who are on ‘extended tours’ elsewhere).

    Insurance exists for the purpose of safeguarding what little stuff most people have. If you (the insurance company) can’t or won’t pay out when bad things happen (theft/disaster/accident) then you have NO FUCKING BUSINESS writing policies in the first place. The FOIR in the fabulous ‘Sunshine’ state (God’s waiting room!) is trying to keep insurance companies from being able to come in and “cherry pick” the areas where they want to sell insurance and those where they don’t.

    And not all of us here are ‘well off’ and live in McMansions.

  22. Sudonum says:

    @doctor_cos: What are you talking about? If you look at the first part of my post, I was quoting RvLeshrac: and responding to his unsupported assertions.

  23. Sudonum says:

    @doctor_cos:
    “When the Federal Government ignores the deteriorating condition of said levee system….”

    After the levees were built the Feds turned maintenance over to the locals. Individual Levee Boards were created to “Maintain” the levees in each individual parish. You can imagine how that worked. Many Levee Boards spent money on things that had nothing to do with the levees. Some boards ever let trees grow on the banks of the levees within their district. Thankfully, none of these trees falling during the winds contributed to the catastrophic failures that caused the city to flood, but easily could have.
    Post Katrina the local boards were abolished and a state wide board was established. The members are appointed by the Governor and have stringent qualifications for appointment, one being that an engineering degree is required.

  24. Sudonum says:

    @doctor_cos:
    And one last comment. Other than as I mentioned above the levees weren’t “deteriorating”. They simply weren’t built to withstand what the Corp said they could. A Cat 3 Hurricane. The Corp has readily admitted that they screwed up when they constructed them. [www.usace.army.mil]

  25. RvLeshrac says:

    @doctor_cos:

    Insurance companies *should* be able to cherry pick. They *should not* be able to squeeze out of a claim, though.

    There’s nothing wrong with selling hurricane insurance to someone in Kansas, they don’t have to buy it. There’s nothing wrong with not selling hurricane insurance on the south FL coast, you’re probably not going to make any money on it. There *IS* something wrong with selling hurricane insurance on the south FL coast and then not paying up when there’s a hurricane.

  26. RvLeshrac says:

    @Sudonum:

    Thank you for pointing out that the elected officials in the city and state hold blame, too. By proxy, the citizens.

  27. Sudonum says:

    @RvLeshrac:
    They hold no blame for the construction of the levees. And you still haven’t given me any evidence to back up your previous claims of fraud.

  28. Sudonum says:

    @RvLeshrac: Nice way to cherry pick yourself

  29. Sudonum says:

    @RvLeshrac:
    And the State of Florida has passed legislation against ‘cherry picking” and so far it has withstood all legal challenges. So yes. Allstate is breaking the law in Florida by cherry picking.

  30. m4ximusprim3 says:

    prove that the insurer flooded consumers in hurricane-prone areas with higher rates.

    I see what you did there, Carey. Very nice.

  31. doctor_cos wants you to remain calm says:

    @Sudonum: My bad, not enough coffee…
    @RvLeshrac: The ‘cherry picking’ we refer to is “We’ll sell you auto insurance, but not home insurance.” Where in other states/areas they sell both.
    And not paying claims is certainly something that Allstate is good at. Your money is in good hands :)

  32. Mr. Gunn says:

    doctor_cos: “Your money is in good hands :)”

    Yep, and if there’s any legal or quasi-legal way they can wrangle it, it’ll stay in their hands, too. Has everyone forgotten how they dismissed huge swaths of homeowner’s claims stating it was flood damage when the roof was torn off the house?